What Is the Depreciation Expense for the Second Year (Straight-Line

question 3

Multiple Choice

What is the depreciation expense for the second year (straight-line method) using the following?

• A)$14,500
• B)$13,500
• C)$3,375
• D)$3,275
• E)None of these

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Definitions:

Marginal Propensity

The proportion of an additional income that an individual or population spends on consuming rather than saving.

Multiplier Effect

The economic concept that an initial increase in spending leads to a greater increase in national income and total economic output.

Investment Accelerator

A concept where an increase in national income or gross domestic product leads to a proportionate increase in investment spending.

Aggregate-Demand Curve

A graph showing the relationship between the total quantity of goods and services demanded across all sectors of the economy and the price level.